Canadian Auto Workers union enters negotiations with Ford

Auto maker will seek to re-establish pattern with concessions

By Gordon Sova

09/11/2009|hrreporter.com|Last Updated: 10/16/2009

On the afternoon of September 8, Ken Lewenza and the CAW met management of Ford of Canada in Toronto to talk concessions. After having provided Chrysler and General Motors with cost savings in the spring, the CAW may have difficulty saying no to Ford.

On the one hand, the principle of a pattern settlement is important for both parties to maintain. The union needs to convince management that it will not be forced to accept an inferior settlement; management needs to know that it will not be undercut by one of its competitors if it settles first.

But, on the other hand, pattern settlements are usually negotiated with the strongest company first, forcing the weaker to match the best outcome the union is able to achieve. In this case, the weaker two of the Big Three established the pattern.

So, what leverage does Ford have and what does the CAW have?

The simple fact of entering into negotiations early signals that the CAW is probably ready to play ball. It has no particular interest in disadvantaging Ford in the face of foreign and transplant competition. But, it has little to gain from caving in. If push came to shove, it could continue until 2011 under the existing agreement.

Ford wants to get the concessions GM and Chrysler have gained and may be sensing that the CAW is in a weaker bargaining position than usual. However, the sense of crisis that motivated the earlier talks is missing here. Ford’s relative health is, in this case, working against it.

The big issue is the fate of the St. Thomas assembly plant, which currently has no product after the end of the current agreement. At 1,600 positions, St. Thomas employs just under one-quarter of Ford’s 7,000-member unionized Canadian workforce. The CAW wants those jobs protected and is talking tough. It points out that GM and Chrysler agreed to maintain their Canadian production but that “Ford’s proportional Canadian presence is much smaller than that of General Motors, Chrysler and even Honda and Toyota.” Ford isn’t offering anything, and the CAW has less to lose. “There is absolutely no incentive for our members to approve a contract that makes a number of sacrifices without improving job security and returning our laid-off members to the job,” the CAW press release stresses.

So, oddly, the CAW’s seemingly weaker position may not be that weak after all. It has less to lose than Ford, and it has something Ford wants: $19 per hour in concessions. The union may be supportive of having similar working conditions for all its auto assembly employees, but that won’t be enough for it to urge them to give wage and benefit concessions and get nothing in return. And it won’t be enough to get those members to vote in favour at ratification meetings.